Fuel price hike: Nigeria may collapse – Victor Umeh

• As Senate mandates CBN to subvent local meter manufacturers

By Ikechukwu Okaforadi

The senator representing Anambra Central on the platform of Labour Party (LP), Victor Umeh, has raised the alarm that Nigeria may collapse if policy makers continue to neglect local manufacturers and development of local capacity in favour of foreign companies.

Senator Umeh gave the warning yesterday while fielding questions with journàlists on the motion titled: ‘Urgent Need to Protect Local Meter Manufacturers in the Ongoing National Mass Metering Programme of the Federal Government’, which he sponsored.

Citing the case of current hike in fuel pump price, he said the crisis has persisted because Nigeria overtime continued to rely on importation of fuel, while neglecting local refining capacities.

He argued that now that the fuel pump price has increased from N530 per liter to N617, it will be impossible to crash it back to N200, without the government investing conscientiously in local refining of petroleum products.

Lamenting that Nigeria favours patronising foreign companies, the lawmaker said “things we can do, let us produce them here, and those we cannot produce here, let us bring foreigners to come and develop local capacity”.

Recall that Senator Umeh had at the commencement of plenary yesterday, moved a motion urging the Senate to intervene in protecting local meter manufacturers in the country, as a measure to create jobs and develop local capacity.

In their resolutions after debating the motion, the Senate mandated the Central Bank of Nigeria (CBN) to utilise various intervention funds to assist local meter manufacturers to locally produce.

Senate further asked the Federal Government to immediately suspend the Transmission Company of Nigeria (TCN) Tender for World Bank funded NMMP Phase 2 in order to undertake comprehensive Review of the Procurement Criteria to prioritize local Manufacturing and Assembling in line with Local Content and Backward Integration Policy that catalyzes loca capacity building, employment generation and economic growth for Nigeria.

In addition, the red chamber also directed the Transmission Company of Nigeria and other stakeholders to negotiate and engage the African Export-Import Bank (AFREXIM) and the African Development Bank (AFDB) for alternative Loan if World Bank loan conditions do not favour local economic growth at Nigeria’s critical time of massive unemployment and devaluation of naira.

Moving the motion, Umeh noted that the Duty of Industry Procurement Regulators in every developing Economy, first and foremost, is to protect its Local Manufacturers and would only try to augment importation of goods and services where there is a clear-cut gap between focal production and consumption.

He said members of Association of Meter Manufacturers of Nigeria (AMMON) are capable of producing world standard smart meters, hence the Transmission Company of Nigeria (TCN) and the Nigerian Electricity Regulatory Commission (NERC) under Phase 1 of the Mass Metering Programme of the Federal Government, issued the Association, after a competitive Bidding Process a “Letter of No Objection to award 4 million meters in 2022.

He said recalled that the World Bank has approved a loan of One Hundred and Fifty-Five Million US Dollars only ($155,000.00) for the National Mass Metering Programme;

He however expressed worry that the ongoing World Bank funded NMMP Phase 2 seeks to promote foreign companies’ participation against competent and prequalified Local Meter Manufacturers, saying this will ultimately result in the loss of jobs and revenue.

“If the bidding process continues as it is, the outcome would be disastrous to members of the Association of Meter Manufacturers of Nigeria who have invested billions of Naira in the Sector and currently employs 10,000 workers directly and more than 30,000 workers indirectly.

“If the federal government and other stakeholders do not make urgent intervention, the ongoing World Bank funded NMMP Phase 2 would ultimately encourage foreign company participation, loss of jobs and funds, to the detriment of Local Manufacturers and causing economic retrogression”, Umeh cautioned.

While regretting that government agencies keep frustrating good policies as contained in Local Content Act, he said Nigeria policy implementers enjoy patronising foreign companies.

He argued that the meters Nigerian companies manufacture are stronger than those imported, adding “we can help our economy by producing basic things.

“Economics tell us that when the balance of trade is skewed against a country, their economy collapses and it becomes a dumping ground. The problem we have is that leaders take Nigerians for a ride. They know the right thing to do but choose to do the wrong things, but it cannot continue.”

At this point, he said the local manufacturing of meters requires seventy percent of local materials, even as he said the 10th Senate will use its oversight powers to pursue compliance with local manufacturing.